Value Investing

I love attending investment conferences. Investors gather to discuss the latest and most efficient methods of profiting from the financial markets. Encouraged and guided by the speakers, who are recognized experts in their discipline, the discourse among the attendees often reveals the current state of the markets. Knowing the consensus… Read More

When you think of the phrase “victim of its own success” and you might think about consumer technology giant Apple Inc. (Nasdaq: AAPL). The company’s track record of groundbreaking innovation has set the bar of expectation at such a high level that even its billions in annual R&D research struggles to meet expectations. What Have You Done For Me Lately? Apple’s status as the world’s most valuable brand, not to mention its position as the largest publicly-traded company, makes Apple an unusual case for an investor to consider. Whether fairly or unfairly, Apple must always answer the question, “What… Read More

When you think of the phrase “victim of its own success” and you might think about consumer technology giant Apple Inc. (Nasdaq: AAPL). The company’s track record of groundbreaking innovation has set the bar of expectation at such a high level that even its billions in annual R&D research struggles to meet expectations. What Have You Done For Me Lately? Apple’s status as the world’s most valuable brand, not to mention its position as the largest publicly-traded company, makes Apple an unusual case for an investor to consider. Whether fairly or unfairly, Apple must always answer the question, “What have you done for me lately?” That said, the company’s estimated $237 billion in cash on the balance sheet, which is more than even the U.S. Treasury ever hopes to amass, gives Apple plenty of resources to answer that question multiple times each year. Estimates from International Data Corporation (IDC) suggest that 1.45 billion smartphones will ship in 2016, a rise of less than 1% year-over-year. That compares to a rise of over 10% in 2015 and represents a huge fall from the 47% rise in 2012. Right now, the market values Apple on the assumption that it won’t grow… Read More

Is the Facebook, Inc. (Nasdaq: FB) story still intact or is time to turn the page? As with several other technology stocks, shares of the social media giant have been under heavy selling pressure ever since Donald Trump’s surprise victory. Both retail and institutional investors have abandoned high-growth stocks like Facebook in favor of banks, industrials, and biotechs. Where Facebook Stands In the case of Facebook, it’s debatable how much of the stock’s recent decline has to do with investors shifting out of tech and into other areas. The shares have fallen as much as 15% since reaching a… Read More

Is the Facebook, Inc. (Nasdaq: FB) story still intact or is time to turn the page? As with several other technology stocks, shares of the social media giant have been under heavy selling pressure ever since Donald Trump’s surprise victory. Both retail and institutional investors have abandoned high-growth stocks like Facebook in favor of banks, industrials, and biotechs. Where Facebook Stands In the case of Facebook, it’s debatable how much of the stock’s recent decline has to do with investors shifting out of tech and into other areas. The shares have fallen as much as 15% since reaching a 52-week high of $133.50 on October 25 after management spooked investors in the third-quarter conference call by warning that ad revenue growth will slow in the quarters ahead. Add in the fact that Facebook hinted of high capital expenses in 2017, which may yield lower earnings per share, and investors quickly moved on to looking for the next great stock. #-ad_banner-#Those who have stuck with the company are now questioning their decision on the heels of recent missteps such as misreporting video ad metrics and a failure to deal with fake news. All of that said, it’s still too early… Read More

Have you ever booked a restaurant reservation online? If so, you most likely went through a website or program offered by OpenTable, a company that was founded in the middle of the dot-com craze in 1998 to make that chore easier. #-ad_banner-#Unlike many other internet companies of that time, OpenTable survived and prospered. It went public in 2009, but was snatched up by Priceline Group (Nasdaq: PCLN) in July 2014. Though it might seem like a strange pairing, the acquisition made sense: Both OpenTable and Priceline are consolidators (in their own specific ways, of course), and OpenTable has managed to… Read More

Have you ever booked a restaurant reservation online? If so, you most likely went through a website or program offered by OpenTable, a company that was founded in the middle of the dot-com craze in 1998 to make that chore easier. #-ad_banner-#Unlike many other internet companies of that time, OpenTable survived and prospered. It went public in 2009, but was snatched up by Priceline Group (Nasdaq: PCLN) in July 2014. Though it might seem like a strange pairing, the acquisition made sense: Both OpenTable and Priceline are consolidators (in their own specific ways, of course), and OpenTable has managed to find an industry where it could connect end consumers with hundreds and thousands of diverse markets (in its case, independent restaurants).  As it turns out, the restaurant industry offers even more chances for innovative companies to come in and put their own stamp on the way restaurants do business. And investors who get in early on the trend could end up doing very well. That’s why I recently added GrubHub (Nasdaq: GRUB) to the portfolio of my premium newsletter, Game-Changing Stocks.  —Sponsored Link— The Saudis’ NEXT Big Move Could Tank The Dollar The Saudis are… Read More

Every now and then they let me take out my turban and crystal ball to do my Professor Marvel impression in regards to the market. So, as the embers flicker out on an interesting (to say the least) 2016, what does 2017 have in store for us? The Economy: Still Chugging Along Fiscal/economic stimulus junkies are still on a placebo high from President-elect Donald Trump’s suggested infrastructure improvement proposal that might range somewhere between $500 billion to $1 trillion. However, as I discussed in a previous article, it’s going to be a while before we see the effects of… Read More

Every now and then they let me take out my turban and crystal ball to do my Professor Marvel impression in regards to the market. So, as the embers flicker out on an interesting (to say the least) 2016, what does 2017 have in store for us? The Economy: Still Chugging Along Fiscal/economic stimulus junkies are still on a placebo high from President-elect Donald Trump’s suggested infrastructure improvement proposal that might range somewhere between $500 billion to $1 trillion. However, as I discussed in a previous article, it’s going to be a while before we see the effects of the inevitable infrastructure build-out. Until then, I’m afraid I’m going to sound a bit like a broken record: the economy will most likely continue to chug along at the tepid 2% or so rate we’re used to hearing. Inflation will remain moderate at best. Sure, we’ll see some inflation in selective areas such as healthcare, but nothing major. Interest Rates: A Hike On The Horizon? Currently, the market is almost 100% sure that Dr. Yellen and Co. are going to hike rates in December. While that may or may not be the case, the bond market has already accepted… Read More

Dow futures plummeted more than 900 points in overnight trading on November 8 as Donald Trump took key swing states and looked ready to seal the election. However, a switch went off before official trading started on the 9th. The uncertainty around a Trump presidency has turned to optimism on hopes for up to $1 trillion in fiscal stimulus. #-ad_banner-#Market expectations have led the S&P 500 3.2% higher since the election but investors in a few sectors have not enjoyed the rally.  The rate on the 10-year Treasury has jumped 21% to its highest point since the beginning of the… Read More

Dow futures plummeted more than 900 points in overnight trading on November 8 as Donald Trump took key swing states and looked ready to seal the election. However, a switch went off before official trading started on the 9th. The uncertainty around a Trump presidency has turned to optimism on hopes for up to $1 trillion in fiscal stimulus. #-ad_banner-#Market expectations have led the S&P 500 3.2% higher since the election but investors in a few sectors have not enjoyed the rally.  The rate on the 10-year Treasury has jumped 21% to its highest point since the beginning of the year. That rise in rates has caused rate-sensitive sectors like utilities and consumer staples to plunge as investors find better yield in bonds.  The Utilities Select Sector SPDR ETF (NYSE: XLU) is down 2.3% and the Consumer Staples Select Sector SPDR ETF (NYSE: XLP) is 2.5% lower since the election. But more than seven years into the bull market, investors can’t afford to neglect stocks that can protect their portfolio when market volatility heats up. Stocks may already be priced to perfection and the slightest hit to confidence in the economy could send the market tumbling. Protecting your portfolio may… Read More

Shares of Cisco Systems (Nasdaq: CSCO) were under heavy selling pressure late last week, falling as much as 6.2% to a session low of $29.61 even though the company reported fiscal first-quarter results that beat Wall Street’s estimates on both the top and bottom lines. The problem? The network equipment giant spooked investors with weak guidance for the fiscal second quarter. #-ad_banner-#But does the guidance justify the punishment? If you recall, Cisco in July basically telegraphed the level of weakness within the telecom sector by issuing a combination of mixed fiscal fourth-quarter earnings and downbeat order metrics. Cisco hinted that… Read More

Shares of Cisco Systems (Nasdaq: CSCO) were under heavy selling pressure late last week, falling as much as 6.2% to a session low of $29.61 even though the company reported fiscal first-quarter results that beat Wall Street’s estimates on both the top and bottom lines. The problem? The network equipment giant spooked investors with weak guidance for the fiscal second quarter. #-ad_banner-#But does the guidance justify the punishment? If you recall, Cisco in July basically telegraphed the level of weakness within the telecom sector by issuing a combination of mixed fiscal fourth-quarter earnings and downbeat order metrics. Cisco hinted that telecommunication companies such as AT&T, Inc. (NYSE: T) and Comcast Communications (NYSE: CMCSA) were delaying purchases, and in some cases, not buying anything at all. These headwinds culminated on what Cisco announced on November 16. For the three months that ended October, the San Francisco-based company reported fiscal first quarter adjusted earnings per share of 61 cents, marking a 3% rise year over year, on revenue of $12.35 billion, which climbed about 1% year over year. Both measures surpassed analyst estimates of 59 cents per share on $12.33 billion in revenue, according to analysts polled by Thomson Reuters. The beat… Read More

During the time of the Pharaohs, Egypt possessed an advanced understanding of medicine. The Greek historian Herodotus described the Egyptians as “the healthiest of all men, next to the Libyans.” This wasn’t an accident.  #-ad_banner-#In his history, The Persian Wars, Herodotus wrote, “the practice of medicine is so specialized among them that each physician is a healer of one disease and no more. All the country is full of physicians, some of the eye, some of the teeth, some of what pertains to the belly, and some of the hidden diseases.” It was a hidden disease that troubled Egyptian doctors… Read More

During the time of the Pharaohs, Egypt possessed an advanced understanding of medicine. The Greek historian Herodotus described the Egyptians as “the healthiest of all men, next to the Libyans.” This wasn’t an accident.  #-ad_banner-#In his history, The Persian Wars, Herodotus wrote, “the practice of medicine is so specialized among them that each physician is a healer of one disease and no more. All the country is full of physicians, some of the eye, some of the teeth, some of what pertains to the belly, and some of the hidden diseases.” It was a hidden disease that troubled Egyptian doctors the most. An Egyptian manuscript dated to 1500 B.C. described a condition as “too great emptying of the urine.” This puzzled doctors. About this same time, doctors in India were confronted with a similar condition they called madhumeha, or “honey urine.” They called it honey urine because some people’s urine attracted ants. Fast forward 3,500 years and the existence of diabetes mellitus is still with us.  Only now, it’s much worse… That’s because diabetes afflicts more than 430 million people worldwide. That’s a 300% increase from 1980 levels. And that number is expected to grow to 645 million by 2040. Read More

Well, it’s finally over. Tuesday’s election was one for the ages. Few people saw this coming, but Donald Trump will be the next President of the United States. Whether Trump was your guy or not, you may be feeling uncertain about how the incoming administration will affect the market and your portfolio. But you may remember something I recently told StreetAuthority readers: “I’ve seen some otherwise-smart people whose opinions I respect say things like ‘If Trump gets elected, the market will crash’ or ‘If Hillary wins, the economy will tank.’ Such talk is nonsense. The reality is that the market… Read More

Well, it’s finally over. Tuesday’s election was one for the ages. Few people saw this coming, but Donald Trump will be the next President of the United States. Whether Trump was your guy or not, you may be feeling uncertain about how the incoming administration will affect the market and your portfolio. But you may remember something I recently told StreetAuthority readers: “I’ve seen some otherwise-smart people whose opinions I respect say things like ‘If Trump gets elected, the market will crash’ or ‘If Hillary wins, the economy will tank.’ Such talk is nonsense. The reality is that the market may get volatile around Election Day, yes, but the chances of it crashing are low.” You may also remember that I cited a recent survey by the Wall Street Journal which found that economists project a 60% chance of a recession within the next four years regardless of who is elected.  That still stands today. Frankly, this should concern you more than whether or not your candidate won on Tuesday. Nevertheless, this election does have implications for both the economy and your portfolio.  Our experts recognized this, too, which is why they weighed in on the election and the ensuing… Read More

Bargain-basement and Warren Buffett are four words that are rarely, if ever, used together. Although Warren is best known for the value investment philosophy, the bargain stocks he chooses often remain relatively high-priced for the average investor. Despite being bargains, the high average stock prices for his picks makes it difficult for the average investor to build a properly diversified portfolio by following his picks.  #-ad_banner-#Remember, Mr. Buffett’s holding company Berkshire Hathaway (NYSE: BRK-A) is currently the most expensive stock on the New York Stock Exchange at $222,490.00 per share! Berkshire Hathaway wholly owns value companies like GEICO, NetJets, and… Read More

Bargain-basement and Warren Buffett are four words that are rarely, if ever, used together. Although Warren is best known for the value investment philosophy, the bargain stocks he chooses often remain relatively high-priced for the average investor. Despite being bargains, the high average stock prices for his picks makes it difficult for the average investor to build a properly diversified portfolio by following his picks.  #-ad_banner-#Remember, Mr. Buffett’s holding company Berkshire Hathaway (NYSE: BRK-A) is currently the most expensive stock on the New York Stock Exchange at $222,490.00 per share! Berkshire Hathaway wholly owns value companies like GEICO, NetJets, and Fruit of the Loom. It even holds a partial interest in Coca-Cola (NYSE: KO) and Restaurant Brands International (NYSE: QSR).  Fortunately, one does not have to buy Berkshire Hathaway shares or even value stocks priced $20.00 or more per share to invest like Warren Buffett.  I have identified two stocks that fit with Warren Buffett’s value philosophy trading for less than $5.00 per share. These low-priced value stocks allow even novice investors to build a value-stock portfolio. Buffett’s Investment Philosophy Warren Buffett became one of the world’s wealthiest people by adhering to the simple philosophy of value investing. The… Read More